As rental prices in cities rise, young professionals are increasingly looking to suburbs and areas away from the city to rent in. These areas need to be close enough to a larger city to allow for an acceptable commute, but far enough away that their rental prices aren’t too high. Southend-on-Sea seems to be this perfect rental hotspot, and it even ended up topping the UK’s buy-to-let investment table last year.
This phenomenon is because graduates and students in London are looking to maximise their savings as they search for places to live, yet still be able to commute to the city centre, and it’s making a real difference in the buy-to-let market. Areas that were once considered "undesirable” areas to live are now seeing new life as those looking to save money flock to them. This makes now an excellent time to get in on this new profitability.
Why is Southend the perfect spot to rent? Firstly, it’s within commuting distance of London, while still being far enough from the city centre to be peaceful and inexpensive. Additionally, the investment cost for properties there is only slightly higher than the national average, but they still yield over 6% rental profits.
Southend’s success also comes partially from its competitive real estate market, its easy commute to the city, and its high rental yields for landlords. Its beautiful seaside location doesn’t hurt, either. The town also has good airport connections in addition to the other things going for it. From a landlord’s standpoint, though, the most important thing about Southend is its investment to payoff ratio. For a relatively small amount of money, real estate investors can buy up properties and let them out to rent-savvy people – like the graduates and students we mentioned above – who don’t mind commuting to the city. Southend may not have the highest rental price outright, but it’s the ratio between the investment and the payoff that really matters to most investors.
Investing in suburban rather than city areas has some upsides and downsides. The most obvious upside is that you get much more bang for your buck when you’re willing to look outside the city. This means, for the same price, you’ll be able to afford a much larger dwelling than you would be able to in the city. Though this might not make a huge difference to singles, it’s excellent for family living. Properties in the suburbs are also almost always quieter and safer than alternatives in the city.
There are a few downsides to suburban buy-to-let investing too, though. For one, there’s historically been less interest in them than there has been in inner-city locations. However, this is slightly balanced out by the fact that renters in the suburbs tend to stay for much longer than city renters do. Additionally, some people view the suburbs as boring if they’re too far from the city. However, when someone’s willing to make that sacrifice of not being in the city, they might find that the cost savings and safe location is worth the humdrum.
Guest Blog by Kylee Ryers